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U.S. Small Business Optimism Increases Furtherby Tom Moeller March 8, 2011

The National Federation of Independent Business indicated that its
index of small business optimism rose to 94.5 in February from an
unrevised 94.1 in January. The latest remained the highest level since
December 2007. Improvement amongst the sub-series was mixed. The
percentage of firms expecting higher real sales in six months rose to its
highest since 2007. The percentage reporting higher earnings this quarter
and those reporting that inventories were too low also increased. Working
the other were declines in the percentage expecting the economy to improve
and the percentage saying now was a good time to expand the business.

The number of firms with job openings now rose to its highest since
September 2008 but the percentage of firms planning to add jobs also
improved. The percentage expecting to make a capital expenditure in the
next six months held constant at an improved level. Finally, the
percentage of firms planning to raise prices increased further to its
highest since late-2008, while the percentage of firms currently raising
prices turned positive for the first time since October 2008.

Businesses making a capital expenditure during the next six months
slipped to 49% and the percentage with few or no qualified job applicants
for job openings rose to 30%.

The most
important problems faced by small business were poor sales (28%),
government requirements (19%), taxes (17%), insurance cost and
availability (8%), quality of labor (7%), competition from large
businesses (5%), inflation (5%) and financial & interest rates (4%).

Roughly 24 million small businesses exist in the U.S. and they create
80% of all new jobs. The NFIB figures can be found in Haver's SURVEYS
database.

The Big Impact of Small Business from the Federal Reserve Bank
of Atlanta is available here.